The Internal Revenue Commission (Customs) is a member of the World Customs Organizations and is a signatory to the Harmonized Commodity Description and Coding System.

It is referred to as the HS Tariff. It is currently being amended to clarify certain texts in order to facilitate the uniform application of the HS and to provide legal certainty with regard to classification decisions. Other texts are being amended to render them more consistent with scientific or customary technology or with trade practice.

Many amendments related to the protection of the environment (eg, creation of new sub-headings for the identification of certain specific categories of waste, the monitoring and control of certain live animals under the Convention on International Trade in Endangered Species of Fauna and Flora (CITES) and the social field (creation of new sub-headings to facilitate the monitoring and control of narcotic drugs and psychotropic substances.

New provisions for administrative fines are inserted. These may now be imposed by the IRC for breaches of the Customs provisions, at a rate of up to 200 per cent of the customs duty that the importer attempted to avoid.

Travelers are currently allowed to bring in certain foreign purchases free of duty if their value does not exceed K250 (K125 for children). To allow for inflation and the depreciation in the value of the Kina since they were set, these amounts will be increased to K1,000 for adults and K500 for children.

Import Duty

Import duty for imported goods are specified in the Customs Tariff Act 1990. In recent years, PNG has reduced tariff protection to local manufacturers in order to comply with international convention. However, significant changes have been made to the duty rates applicable to raw materials and intermediate products to stimulate the local manufacturing sector.

• A new import levy is introduced on all imports, including those free of duty, at the rate of 2 per cent. The mining and oil industry, medical and education supplies and charities will be exempt from the levy. The levy will be calculated at 2 per cent of the total, duty paid, cost of imports (C.I.F cost + customs duty, in any + excise duty, if any + GST). Duty free aid project imports will continue to be also free of the levy. Imposition of the levy started immediately after the 2004 Budget was introduced in Parliament.

• In accordance with an agreement by the Government with the sugar industry, the protective tariff for the industry is extended from 2006 to 2011. A new definition of ‘Icing Sugar’ has been inserted to prevent abuse of the duty free status of icing sugar.

• The export tax payable by logging companies on the export of logs is reduced by 5 per cent.

Excise Duty

Excise duty on certain locally manufactured goods are specified in the Excise Tariff Act Chapter 107. The main commodities subject to excise duty are cigarettes and tobacco products, beer, spirituous liquors and petroleum products.

• Duty rates on alcohol and tobacco products are set in Kina and Toea. To allow them to keep pace with inflation, those money amounts are increased by 5 per cent every six (6) months. The industry has been suffering reduced sales because of the general tightening of the economy. To assist the industry, the 5 per cent increases will be halted until December 2004. They will then start again, but at a reduced rate of 2.5 per cent every six months.

• To assist the fishing industry, the excise on diesel for fishing boats is 3 toea per litre, instead of the normal 6 toea. That reduction was previously notice. Gazette notices can no longer be used for such reductions and this will now be as such in the Act.

• To assist agriculture, the 10 per cent excise on agricultural tractors has been reduced to nil.

• The 150 per cent excise on poker machines has been reduced to 50 per cent to allow the industry to replace some outdated machines.

Export Duty

Export duty on goods exported from PNG are specified in the Customs Tariff Act 1990 Schedule 2. The export duty applicable to time logs is one of the major revenue items for PNG. All logs are graded, measured and verified before export and export duty is calculated on cubic metre basis. Stringent documentary requirements are in place to control the exploration of all timber products from PNG.

The only other product attracting export duty is crocodile skin.

There are however, export restrictions on numerous other products of PNG. Export Permits are required for beche-de-mer (sea cucumber), lobster, prawns. Oyster, trochus shells and others. The export of spices, whether processed or not, is controlled by the PNG Spice Industry Board.

Quarantine

The National Quarantine and Inspection Authority (NAQIA) is responsible for the control and movement of all plants, animals and humans in respect of pests and diseases. Stringent controls are in place at airports and seaports to ensure than PNG is kept free of such diseases as Foot and Mouth Disease, Mad Cow Disease, and others.

Censorship

PNG has a very strict relating to censorship. The classification of Publication (censorship) Act 1989 refers to the classification of publications, including books, magazines, films and photographic material. It also provides guidelines for the prohibition of objectionable and unclassified publications.

Customs officers have the responsibility of intercepting such objectionable material from, passengers and importers and referring to the Chief Censor.